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Home My WebLink About05.b. Receive April 2021 budget-to-actual financial overview Page 1 of 6 Item 5.b. CENTRAL SAN June 22, 2021 TO: FINANCE COMMITTEE FROM: CHRISTOPHER THOMAS, FINANCE ADMINISTRATOR KEVIN MIZUNO, FINANCE MANAGER REVIEWED BY: PHILIP LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION ROGER S. BAILEY, GENERAL MANAGER SUBJECT: RECEIVE APRIL 2021 BUDGET-TO-ACTUAL FINANCIAL OVERVIEW Attached is the Financial Overview Report summarizing the Fiscal Year (FY) 2020-21 financial results for the Running Expense (O&M) and Sewer Construction funds through the month of April 2021. The O&M Fund expenditure results are favorable at approximately$8.7 million (11.5%) under year-to-date budget estimates. Through April 2021, approximately 73.9% of total adopted FY 2020-21 O&M Fund appropriations have been expended. Historically, Sewer Service Charge (SSC) revenue allocated from the County Auditor-Controller's Office (ACO)to Central San's O&M Fund (by default) in April are subsequently re-allocated by Central San staff to the Sewer Construction fund based on the Board split of SSC published in the annual budget. This year, however, the April 2021 allocation of SSC from the ACO is being maintained in the O&M fund in anticipation of a Board-approved transaction to significantly pay down the remaining pension UAAL balance with CCCERA in June 2021. Higher than normal SSC funds will be needed in the O&M fund to finance this UAAL pay-down. Accordingly, revenues for the O&M fund are significantly above the year-to-date budget projections by approximately$27.0 million, or 58.6%. The financing necessary to effectuate this transaction was discussed and approved by the Board on J une 3, 2021. The Sewer Construction Fund has spent$51.3 million through April 2021, representing 66.2% of the estimated year-to-date budget for capital project expenditures. As of the month ended April 2021, the Sewer Construction Fund is reporting a negative year-to-date revenue variance of $22.6 million (30.0%), attributable to the SSC revenue allocation change described previously. Refer to the attached Financial Overview for additional details on O&M and Sewer Construction fund budgetary results. Strategic Plan re-In GOAL THREE: Fiscal Responsibility Strategy 1—Maintain financial stability and sustainability, Strategy 2—Ensure integrity and transparency in financial June 22, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 94 of 165 Page 2 of 6 management ATTACHMENTS: 1.April 2021 Financial Overview June 22, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 95 of 165 Tuesday,June 8,2021 To:The Board of Directors I CENTRAL SAN From:Finance Division Subject:0&M Fund Budget-to-Actual Overview 5019 IMHOFF PLACE,MARTINEZ.CA 94555-A392 Timeframe:FY 2020-21 Year-to-Date(Through April 202 1) YTD YTD Fav/(Unfav) Total YTD YTD Fav/(Unfav) Variance FY Budget Budgeted Actual Variance (%) Significant Variance Explanations Revenue: Operating Revenues $ 62,464,762 $ 43,593,903 $ 70,272,858 $ 26,678,955 61.2% Sewer Construction Fund portion of SSC revenue maintained in 0&M Fund in order to have sufficient cash available for potential UAAL payoff with CCCERA in June 2021. Non-Operating Revenues 2,967,400 2,472,833 2,785,903 313,070 12.7% Positive variance is due to higher than budgeted revenues from Side Sewer Inspection,Right of Way Fees,Lease Rental Income, and Miscellaneous Income through April 2021. Total Revenue $ 65,432,162 $ 46,066,736 $ 73,058,761 $ 26,992,024 58.6% Expenses: Salaries&Wages $ 39,543,191 $ 32,952,659 $ 30,278,658 $ 2,674,001 8.1% Savings result from higher than normal vacancy factor ranging from 4.5%-7.8%through April 2021. Positive variance decreased from 11.1%in March and should continue to shrink due to COLA adjustment. Employee Benefits 11,545,173 9,620,978 8,967,688 653,289 6.8% Savings result from higher than normal vacancy factor ranging from 4.5%-7.8%through April 2021. Positive variance decreased from 8.9%in March and should continue to shrink due to COLA adjustment and increased benefit premium. Unfunded Liabilities 15,827,016 13,189,180 12,652,360 536,820 4.1% Savings result from higher than normal vacancy factor ranging from 4.5%-7.8%through April 2021. Positive variance decreased from 7.1%in March and should continue to shrink due to COLA adjustment and increased benefit premium. Purchased Property Services 6,334,577 5,278,814 3,742,764 1,536,050 29.1% Largely attributable to YTD underspending in the treatment plant for repairs&maintenance through April 2021. Variance expected to contract by close of FY. Purchased Professional,Technical& 6,305,477 5,254,564 3,350,648 1,903,916 36.2% Spending on contracted technical services lower than projected Other Services in various divisions,including:Planning&Development Services, Environmental&Regulatory Compliance,and CSO. Supplies&Materials 9,466,300 7,888,583 6,843,049 1,045,534 13.3% Primarily attributable to savings in Treatment Plant Maintenance Division where YTD general supplies for repairs and maintenance are lower than projected. Other Expenses 1,644,604 1,445,503 1,117,666 327,837 22.7% Lower costs incurred to-date while COVID-19 risk mitigation measures remain in place. Total Expenses $ 90,666,338 $ 75,630,282 $ 66,952,835 $ 8,677,447 11.5% Abbreviations Legend, FY=Fiscal Year PY=Prior Year UAAL=Unfunded Actuarially Accrued Liability SSC=Sewer Service Charges June 22, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 96 of 165 Running Expense Fund(O&M)Total Expense YTD FY 20-21(Millions) $80 $75.6 $70 $68.1 $66.953 $60 $60.5 59.168 $50 $53.07 51.930 $45.5 5.632 $40 $38.0 8.888 $30 $30.5 31.784 5.624 $23.0 $20 18.652 $15.1 12.211 $10 — $7.556 .460 July August September October November December January February March April —Budget —Actual June 22, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 97 of 165 Monday,June 7,2021 CENTRAL SAN To:The Board of Directors From:Finance Division Subject:Sewer Construction(Capital)Fund Budget-to-Actual Overview Timeframe:FY 2020-21 Year-to-Date(Through April 202 1) YTD Total YTD YTD YTD Fav/(Unfav) Fav/(Unfav) FY Budget Budgeted Actual Variance Variance(%) Significant Variance Explanations Revenue: Sewer Service Charges-Capital $ 56,673,402 $ 54,224,185 $ 30,156,394 $ (24,067,791) -44.4% Sewer Construction Fund portion of SSC revenue maintained in 0&M Fund in anticipation of UAAL payoff to CCCERA in June 2021. Other Revenues 22,979,500 21,009,250 22,471,050 1,461,800 7.0% Attributable to the first property tax installment coming in higher than projected in budget. Capital Contributions 15,300,000 - - - Concord share of treatment plant capital billed at end of the FY. Total Revenue: $ 94,952,902 $ 75,233,435 $ 52,627,444 $ (22,605,991) -30.0% Expenses by Program: Collection System $ 49,686,784 $ 37,107,394 $ 28,231,827 $ (8,875,567) -23.9% Treatment Plant 39,194,584 26,661,419 13,488,282 (13,173,137) -49.4% General Improvements 6,108,365 4,734,602 4,705,176 (29,426) -0.6% Recycled Water 11,506,037 9,013,587 4,906,832 (4,106,755) -45.6% Contingency 2,100,000 - Total Expenses: $ 108,595,770 $ 77,517,002 $ 51,332,117 $ (26,184,885) -33.8% * ** *Includes rollover of unspent capital project appropriations from prior year of$21.0 million. **Spent 66.2%of projected YTD budget. Abbreviations Legend: FY=Fiscal Year PY=Prior Year UAAL=Unfunded Actuarially Accrued Liability SSC=Sewer Service Charges June 22, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 98 of 165 Sewer Fund(Capital)Spending FY 20-21(Millions) $90 $80 $77. $70 $6 $69.77 $63 2.70 $60 .07 $50 $50.9 0.38 $51.33 .82 .63 $40 $41.34 37.209 8.47 $30 _ 1.66 $28.5 25.704 .670 $20 $20.37 8.339 $10 9.799 7.699 $3.632 .944 July August September October November December January February March April -Projected(100%spend) -Actual -90%Target June 22, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 99 of 165